2018 (1) TMI 650 - AT - Service Tax

Business Auxiliary Services - Support Services for business or commerce - scope of SCN - Held that - the Commissioner (Appeals) has gone beyond the scope of the show cause and in the appellant s own case Doon s Caterers Versus Commissioner of Service Tax, Delhi 2015 (9) TMI 1470 - CESTAT NEW DELHI , on identical set of facts, where it was held that The principle is well settled that a classification of taxable service which is not alleged in the show cause notice cannot be concluded to support levy of tax. The ld. Commissioner (Appeals) has gone beyond the scope of SCN - appeal allowed.

Summary

Issues:
1. Classification of services provided by the appellant under "Support Services for business or commerce" or "Business Auxiliary Services."
2. Scope of the show cause notice in determining the classification for levy of tax.

Analysis:

Issue 1: Classification of services
The case involved two cause notices issued to the appellants demanding service tax under the category of "Support Services for business or commerce" for providing comprehensive onboard services in trains. The Adjudicating Authority confirmed the demands, but the Commissioner classified the activities under "Business Auxiliary Services." The Tribunal noted that the Commissioner had erred in the classification. It was observed that the lower appellate authority should base its decision on what was alleged in the show cause notice. The Tribunal referred to a previous case where it was established that a classification not alleged in the show cause notice cannot support the levy of tax. Consequently, the Tribunal held that the Commissioner had overstepped the scope of the show cause notice, leading to the setting aside of the impugned order. The appeals were allowed, providing consequential relief if any.

Issue 2: Scope of the show cause notice
The Tribunal emphasized the importance of adhering to the scope of the show cause notice in determining the classification of services for tax purposes. It was reiterated that the lower appellate authority should base its findings solely on what was alleged in the show cause notice. The Tribunal highlighted that the proper discharge of appellate jurisdiction requires a decision based on the allegations in the notice. By deviating from this principle, the Commissioner's classification was deemed incorrect. The Tribunal's decision to set aside the impugned order was based on the Commissioner's failure to stay within the confines of the show cause notice. This ruling underscores the significance of maintaining the link between the allegations in the notice and the final classification for tax assessment purposes.

This detailed analysis of the judgment showcases the Tribunal's scrutiny of the classification of services and the necessity of adhering to the scope of the show cause notice in tax matters, ultimately leading to the allowance of the appeals and the setting aside of the Commissioner's order.